China's CNOOC to buy Canadian oil sands firm Opti
Chinese oil giant CNOOC has agreed to acquire Canadian oil sands producer Opti Canada for about $2.1 billion.
The $2.1 billion includes aggregate cash consideration of $1.25 billion payable to the holders of the OPTI shares ($34 million) and the second lien noteholders ($1.2 billion).
In addition, due to a change in control of Opti as a result of the transaction, Opti will be required to offer to repay the holders of its outstanding first lien notes ($825 million in principal amount) pursuant to the indentures governing the notes.
The transaction will be influenced by way of a plan of arrangement through concurrent proceedings under the companies' Creditors Arrangement Act (Canada) and the Canada Business Corporations Act.
The proposed transaction must be approved by the second lien noteholders at a special meeting that is expected to be held in September 2011.
Noteholders representing approximately 55.2% of the principal amount of the second lien notes have executed support agreements pursuant to which, among other things, they have agreed to vote in favor of the transaction.
The proposed transaction is also subject to certain terms and conditions, including, among other things, applicable government and regulatory approvals by the relevant authorities in Canada and the People's Republic of China, and Canadian court approval.
The transaction is expected to be completed in the fourth quarter of 2011.
Upon completion of the deal, Opti will become an indirect wholly-owned subsidiary of CNOOC, and all of the second lien notes will be transferred or assigned, directly or indirectly, to a subsidiary of the company.
All existing options, warrants and other rights to purchase Opti shares will be cancelled.
The principal asset of Opti consists of a 35% working interest in the Long Lake and three other project areas located in the Athabasca region of northeastern Alberta.
The Long Lake project includes steam assisted gravity drainage (SAGD) operation and an upgrader.
Nexen, a Canadian-based global energy company, holds the remaining 65% and is the sole operator.
The Long Lake SAGD operation is expected to have through-put rates of approximately 72,000 bpd of bitumen at full production.
It is anticipated that the Long Lake upgrader will ultimately produce approximately 58,500 bpd of products, primarily premium sweet crude.
As disclosed in Opti documents filed with securities regulatory authorities in Canada, Opti's working interest share, before royalties, of raw bitumen reserves and resources on its oil sands leases is estimated to be 195 million bbl of proved reserves, 534 million bbl of probable reserves, 1,100 million bbl of contingent resources and 335 million bbl of prospective resources.
These reserves and resources are estimated to be sufficient to support approximately 430,000 bpd (150,000 barrels per day net to Opti) of bitumen production.
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